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A television documentary on overeating claimed that Americans are about 10 pounds overweight on average (μ). To test this claim, 18 randomly selected individuals were examined; their average (x̄) excess weight was found to be 12.4 pounds, and the sample standard deviation (s) was 2.7 pounds.

MNS601 – HOMEWORK ASSIGNMENT #3

Name:
___________________

Directions: (a) Enter all
your answers into this Word document in the space immediately following each
question and submit the entire document.
. (b) SHOW ALL YOUR
WORK/calculations or results from a template.
When you use a template to calculate an answer, copy and paste the
results into this document. (c) While
putting your answers in a different color font
is helpful, please DO NOT use red font since
this is the color used to provide feedback on your answers.

A
television documentary on overeating claimed that Americans are about 10 pounds
overweight on average (μ). To test this
claim, 18 randomly selected individuals were examined; their average (x̄) excess weight was found to be 12.4
pounds, and the sample standard deviation (s) was 2.7 pounds. At a significance level of 0.01, is there any
reason to doubt the validity of the claimed 10-pound value? [15
POINTS]

ANSWER:

A stockbroker at Critical Securities reported
that the mean rate of return on a sample of 10 oil stocks was 12.6 percent with
a sample standard deviation of 3.9 percent.
The mean rate of return on a sample of 8 utility stocks was 10.9 percent
with a sample standard deviation of 3.5 percent. At the .05 significance level, can we
conclude that there is more variation in the oil stocks? [15
POINTS]

ANSWER:

A
study compared the effects of four 1-month point-of-purchase promotions on
sales. The unit sales for five stores using
all four promotions in different months follow.

Free Sample 78 87 81 89 85

On-pack gift 94 91 87 90 88

Cents off 73 78 69 83 76

Refund by mail 79 83 78 69 81

At the 0.01 level of significance, do the
promotions produce different effects on sales?
[Note: There are 4 groups
to compare, i.e., the 4 marketing methods.]
[20 POINTS]

ANSWER:

William
Hawkins, VP of personnel for International Motors, is working on the
relationship between a worker’s salary and absentee rate. Hawkins divided the salary range of
International into twelve grades or levels (1 being the lowest grade, 12 the
highest) and then randomly sampled a group of workers. He determined the salary grade for each
worker and the number of days that employee had missed over the last 3 years. [15
POINTS]

Salary ranking 11 10 8 5 9 9 7 3

Absences 18 17 29 36 11 26 28 35

Salary ranking 11 8 7 2 9 8 6 3

Absences 14 20 32 39 16 26 31 40

Construct a scatter diagram for these data and
indicate the type of relationship.

ANSWER:

A
study by the Atlanta, Georgia, Department of Transportation on the effect of
bus ticket prices on the number of passengers produced the following results:

Ticket price (cents)

25 30 35 40 45 50 55 60

Passengers per 100 miles

800 780 780 660 640 600 620 620

Plot these data. [5
POINTS]

ANSWER:

Develop the estimating equation that best
describes these data. [10 POINTS]

ANSWER:

Predict the number of passengers per 100 miles
if the ticket price were 70 cents. [5 POINTS]

ANSWER:

A
financial consultant is interested in the differences in capital structure
within different firm sizes in a certain industry. The consultant surveys a group of firms with
assets of different amounts and divides the firms into three groups. Each firm is classified according to whether
its total debt is greater than stockholders’ equity or whether its total debt
is less than stockholders’ equity. The
results of the survey are:

Firm Asset Size (in $ thousands)

<500 500-2,000 2,000 + Total

Debt
< equity 7 10 8 25

Debt
> equity 10 18 9 37

Total 17 28 17 62

Do the
three firm sizes have the same capital structure? Use the 0.10 significance level. [15
POINTS]